Which of the Following Statements Regarding the Current Ratio Is

question 81

Multiple Choice

Which of the following statements regarding the current ratio is true?

• A)The current ratio is calculated as the difference between current assets and current liabilities.
• B)Other things being equal,the lower the current ratio,the more assurance creditors have about being paid in full and on time.
• C)The current ratio is widely used to evaluate liquidity.
• D)The main components of the current ratio are cash and property,plant,and equipment.
• E)The comparison of a company's current ratio to the industry average is meaningless.

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Definitions:

Administration of the Law

The process and institutions through which laws are enforced and applied.

Conferred Upon Behavior

The act of attributing or assigning certain qualities, rights, or characteristics to a specific manner of acting.

Positivist

Relates to a philosophy that emphasizes empirical evidence and scientific methods as the basis for knowledge.

Constructionist Perspectives

The viewpoint that realities are socially constructed through human interaction, emphasizing the role of language, culture, and shared beliefs in shaping our understanding of the world.